Comparison of New Income Tax Slabs with Old for FY 2020-21 for Individual earning Income between Rs. 10 Lakhs to 12.5 Lakhs

 

Individual earning Income between Rs. 10 Lakhs to 12.5 Lakhs

Income of Rs. 12 lakhs
	Old Regime (w/o Deductions)	Old Regime (with Deductions)	New Regime
Income	1,200,000.00	1,200,000.00	1,200,000.00
Deductions/Exemptions	-	200,000.00	-
Taxable Income	1,200,000.00	1,000,000.00	1,200,000.00
Tax	172,500.00	112,500.00	115,000.00
Cess @ 4%	6,900.00	4,500.00	4,600.00
Total Tax	179,400.00	117,000.00	119,600.00

 

Ø  Income Up to 12.5 Lakhs, Maximum saving due to Low Rate of Tax is Rs. 62,500/-, This can be saved with Investment of Rs. 2,09,000/-

Ø  For Salaried Individuals, Rs. 2.1 Lakhs Investment for Deductions can be managed:

o   Rs. 50000 from Standard Deduction without any investment/proof and

o   Rs. 70000 – Rs. 100000 must be going to EPF (Compulsory) considering 12% of Basic and DA. OR

o   Those having Lower EPF must be having Higher HRA. Hence EPF and HRA deduction will be saving around Rs. 80000 – Rs. 125000.

o   Tuition Fees of Children’s is also unavoidable and must be around Rs. 35000 – Rs. 60000

o   Saving Bank Interest and LTC benefit may range from Rs. 30000 – Rs. 50000.

Ø  Clearly For Salaried Individuals it is beneficial to opt Old Regime with Deductions and Exemptions

Ø  Salaried / Self Employed Individuals if already having regular prefixed investments / Insurance like LIC Policy, House Loans, and then Old regime is better.

Ø  And for Self Employed Individuals who do not want to Invest in any of the saving Options available (being low ROI) may opt for New Regime without Deductions. Otherwise Old Regime is better.